The Chancellor has announced a temporary cut to Stamp Duty between the 23rd September 2022 and the 31st March 2025. The threshold before you start paying tax has increased from £125,000 to £250,000. For First Time Buyers, it’s increased from £300,000 to £425,000 providing the property is worth no more than £625,000.
Whether you’re looking to get on the property ladder, move house, buy a second home, or purchase a Buy To Let, you’re likely to save money with the new Stamp Duty Rates. The average saving in Surrey, Hampshire and Berkshire (based on a £400,000 property) will be £2,500 for home movers and £5,000 for First Time Buyers.
Let’s take a look at what this Stamp Duty cut means for you and how it compares to the previous rates.
First Time Buyers
What Were the Old Stamp Duty Rates?
The previous threshold before Stamp Duty kicked in was £300,000 as long as the property was worth no more than £500,000.
Tax on the first £300,000 = 0%
Tax on the next £200,000 (up to £500,000) = 5%
Properties over £500,000 = You didn’t qualify for First Time Buyer relief and would have paid standard rates (see Moving House section below).
What Are the New Stamp Duty Rates as of September 2022?
The new threshold before Stamp Duty kicks in is £425,000 as long as the property is worth no more than £625,000.
Tax on the first £425,000 = 0%
Tax on the next £200,000 (up to £625,000) = 5%
Properties over £625,000 = You don’t qualify for First Time Buyer relief and will have to pay standard rates (see Moving House section below).
How Much Could You Save with the New Stamp Duty Rates?
Properties worth £300,000:
Stamp Duty on the old rates: £0
Stamp Duty on the new rates: £0
Properties worth£400,000:
Stamp Duty on the old rates: £5000
Stamp Duty on the new rates: £0
You’ll save £5,000.
Properties worth£500,000:
Stamp Duty on the old rates: £10,000
Stamp Duty on the new rates: £3,750
You’ll save £6,250
Properties worth £625,000:
Stamp Duty on the old rates: £21,250
Stamp Duty on the new rates: £10,000
You’ll save £11,250
Moving House
What Were the Old Stamp Duty Rates?
The previous threshold before Stamp Duty kicked in was £125,000.
Tax on the first £125,000 = 0%
Tax on the next £125,000 (up to £250,000) = 2%
Tax on the next £675,000 (up to £925,000) = 5%
Tax on the next £575,000 (up to £1,500,000) = 10%
Tax on any amount above £1,500,000 = 12%
What Are the New Stamp Duty Rates as of September 2022?
The new threshold before Stamp Duty kicks in is £250,000.
Tax on the first £250,000 = 0%
Tax on the next £675,000 (up to £925,000) = 5%
Tax on the next £575,000 (up to £1,500,000) = 10%
Tax on any amount above £1,500,000 = 12%
How Much Could You Save with the New Stamp Duty Rates?
Properties above £125,000:
You’ll save money with the new Stamp Duty Rates.
Properties above £250,000:
You’ll save £2,500.
Second Home or Buy To Let
You can benefit from the new Stamp Duty Rates even if you’re buying a second home or Buy To Let property. The 3% surcharge still applies, but for any property above £250,000 you’ll save £2,500.
The Bottom Line
If you’re a First Time Buyer you could save £6,000 or more with the new Stamp Duty Rates. If you currently or have previously owned a property, you’re likely to save £2,500. If you’re thinking about taking advantage of the new Stamp Duty Rates to buy a new home or buy your first home, we’re happy to answer any questions you may have. We’re a trusted, family-run business, and we’ve been helping our local community with mortgages and property for over 30 years! It’s free to chat with us and discuss your situation. We can also help you find the right mortgage, apply on your behalf, and liaise with your estate agent, solicitor and lender to ensure your journey is a happy one. We look forward to chatting with you!
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